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No security risks in Chinese takeover of Canadian satellite firm, Trudeau says

The deal has created unease among opposition MPs and congressional representatives in the U.S. about allowing Chinese firm Hytera Communications Co. Ltd. to have access to sensitive defence technology.

“We would not move forward with approving investments under the Investment Canada Act if we were not assured and comfortable that there is no risk to national security, period,” Prime Minister Justin Trudeau said. (Justin Tang / THE CANADIAN PRESS)

By The Canadian Press

Tues., June 27, 2017

OTTAWA—Prime Minister Justin Trudeau is making his strongest defence yet of his government’s decision to allow a Chinese telecom giant to take over a Canadian satellite technology company.

Trudeau says an initial government review of the takeover, required under federal law, unearthed no significant national security risk and didn’t require any further reviews, allowing the deal to be allowed to proceed.

He insists his government would never approve any foreign takeover if there is even a hint of concern that it would harm national security.

Hytera Communications Co. Ltd. is set to take over Vancouver-based Norsat International Inc., which supplies materials to the American military and Canada’s NATO partners.

The deal has been the focus of a debate over national security risks and the federal government’s willingness to approve a Chinese takeover of a Canadian technology company.

Opposition MPs have repeatedly raised concerns about the takeover and there is unease among congressional representatives in the United States about allowing the Chinese firm to have access to sensitive defence technology.

The private Chinese firm first made a bid for the Vancouver-based technology company in 2016, triggering a review under federal law to ensure Canadian interests weren't harmed in the foreign takeover.

It was only earlier this month that the results of the review were made public when the company said it had been informed that a formal security review wouldn’t be required.

The national security agencies involved in the review recommended the deal to be allowed to proceed, Trudeau said.

“The review they did was adequate to give them confidence that there was no risk to national security. Therefore, their recommendation to the minister was to allow it to proceed. So we did.”

“We would not move forward with approving investments under the Investment Canada Act if we were not assured and comfortable that there is no risk to national security, period,” he told a news conference.

“It doesn’t matter what country it’s from, it doesn’t matter what deal it is, if there’s a risk to national security, we won’t move forward.”

The deal also comes as the Liberals and China pursue exploratory free trade talks; Canadian government is aiming at opening up the Chinese market to domestic producers in the face of Donald Trump’s “America First” policy on trade.

The ongoing dialogue included an agreement last week where the two countries agreed not to engage in state-sponsored hacking of each other's trade secrets and business information.

Opposition MPs have repeatedly raised concerns about the Norsat takeover, there is unease among congressional representatives in the United States about allowing the Chinese firm to have access to sensitive defence technology.

The Globe and Mail reported Monday that the U.S. Department of Defense is reviewing all its business dealings with Norsat as a result of the deal.

Norsat makes satellite communications systems used for national security and defence purposes. It has a number of government customers in both Canada and internationally, including the Canadian Coast Guard and the Pentagon.

Trudeau said Canadian security agencies consulted American officials as part of their preliminary security screen. Last week, Norsat security holders voted overwhelmingly in favour of the takeover bid.

The deal is still subject to approval by the B.C. Supreme Court as well as other regulatory approvals and certain other closing conditions. Norsat was scheduled to apply Tuesday for a final court order to approve the deal.

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